Main menu

Mercedes Benz Might Withdraw From Detroit Auto Show

World Bulletin / News Desk

The global auto industry on Monday was bracing for more confrontational tweets from President-elect Donald Trump, with the festive Detroit auto show due to kick off here.

As he prepares to take office later this month, Trump has used his Twitter account to take aim at auto makers, warning that they may face stiff import tariffs for selling cars made with foreign labor on the US market.

As recently as Thursday, Trump trained his sights on Toyota for building cars in Mexico, after having similarly spotlighted Ford and General Motors.

In what appeared to be a preemptive maneuver, Fiat Chrysler announced late Sunday that it return manufacture of the Ram heavy-duty truck to the United States from Mexico, while investing $1 billion in Michigan and Ohio factories and creating 2,000 jobs.

After having taken on several auto makers in succession, the annual celebration of the global auto industry in a state which narrowly voted for Trump in November seems like a very inviting target for the president-elect.

Scott Houldieson, a regional executive with the United Automobile Workers in Chicago, told AFP that Mexican auto workers earned between $5 and $8 an hour, versus an average of $20 for newly hired Ford workers in the United States.

At corporate headquarters and in the halls of Detroit hotels where executives have gathered, a pressing question has been whom the president-elect would target next. Have Ford, Toyota and GM weathered the storm?

Monitoring Trump on Twitter

A representative for one automaker who declined to be named told AFP that keeping close watch on Trump's Twitter account, his favored means of public address, had become a priority for the company's social media team.

AFP got a similar reply from a representative for Audi, a Volkswagen AG brand which began producing the new Q5 model in Puebla, Mexico in September. Volkswagen-branded cars are also produced in the country.

The Audi plant, the first for the brand in North America, has a production capacity of 150,000 cars a year and employs as many as 4,200 people.

Fiat Chrysler, which took a US taxpayer bailout in 2009 following the global financial crisis, emphasizes its presence in the United States.

"Since June 2009, we have announced $8.4 billion in US-based investments and have added almost 25,000 new US jobs," said Jodi Tinson, a spokeswoman.

Trump has threatened to withdraw from or renegotiate the North American Free Trade Agreement, which involves Canada, the United States and Mexico.

Under the treaty, if at least 65 percent of a car's parts have a North American origin, it can be sold duty-free in the region.

Auto manufacturers in the United States have seized on this provision to invest in Mexico. Between 1999 and 2013, foreign investments in that country have exceeded $30 billion, according to the Mexican trade promotion body ProMexico.

The United States in the first quarter of 2015 also became the largest importer of Mexican-made cars, according to the Mexican automotive association AMIA.

The largest US car makers have production facilities in Mexico, including companies like Mercedes Benz and BMW, which will begin producing cars there in 2018 and 2019 respectively.